13 Best Stocks to Buy According to Citadel LLC

Page 12 of 12

1. Strategy Inc. (NASDAQ:MSTR)

Value of Citadel’s Long Position: $4.8 Billion

Number of Hedge Fund Holders: 45

Potential Upside: 90%

Returns between June 30 and October 24: -28%

Strategy Inc. (NASDAQ:MSTR) is one of the best stocks to buy according to Citadel LLC. On October 31, TD Cowen analyst Lance Vitanza reaffirmed his Buy rating on the stock but lowered his price target to $535 from $620 previously, following the company’s Q3 results, according to TheFly. While the target was cut, the analyst said that the new credit rating by S&P could expand its investor base and help increase the reach of funding. As was visible in earlier cycles, he also anticipates a rebound in bitcoin-related premiums and capital issuance by 2026.

Before this update, Vitanza had reaffirmed his Buy rating on the stock on October 27 with an unchanged price target of $620, citing the increasing institutional adoption of bitcoin as the primary driver of his positive stance.

Vitanza cited JPMorgan’s acceptance of bitcoin as collateral for certain financing activities to emphasize the structural tailwinds from the institutional and broader financial systems’ adoption of digital assets. This, in his view, supports the investment case for established players and investors in the space, including Strategy Inc. (NASDAQ:MSTR). With a disciplined capital strategy, the company’s bitcoin holdings grow faster than equity issuance, enabling it to increase bitcoin ownership per share and, in turn, increase shareholder value.

According to an October 28 report from Bloomberg, S&P Global Ratings cited the company’s heavy reliance on cryptocurrency as one of the major reasons for assigning it a B- credit rating, a junk or non-investment-grade rating. Moreover, the rating company also flagged limited business diversification and low liquidity as key credit risks.

Separately, while Strategy Inc. (NASDAQ:MSTR) is sometimes seen as a proxy for bitcoin, YTD performance has diverged, with the stock down around 2% and bitcoin up nearly 19%. Investors should also note that Strategy carries high volatility with an equity beta of 3.8.

Strategy Inc. (NASDAQ:MSTR) is a technology company that calls itself the world’s first and largest Bitcoin Treasury Company. The company has substantial Bitcoin holdings, which form a core part of its corporate strategy. Additionally, its software platform provides enterprise analytics and data visualization solutions.

While we acknowledge the potential of MSTR to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSTR and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: Goldman Sachs Defense Stocks: Top 10 Stocks to Buy and 13 Best Tech Stocks Under $10 to Invest In.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.

Page 12 of 12